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Halting pay cuts to doctors was a start, but a healthy debate awaits down the road
The Atlanta Journal-Constitution
Published on: 07/27/08
The fact that Congress had more than enough votes last week to override President Bush's veto of Medicare spending reforms isn't surprising: The battle pitted doctors against insurance companies, and because of their relationships with patients (read: voters), doctors always have more political clout than insurance companies.
Even Georgia's Republican senators, Saxby Chambliss and Johnny Isakson — two of Bush's staunchest supporters — succumbed to the pressure from physicians and retirees and voted to buck the president's wishes. As a reward, the American Medical Association planted a big wet kiss on Chambliss and Isakson in full-page ads last week, thanking them for helping doctors continue to serve Medicare patients.
Under the reform bill, Congress halted a planned 10.6 percent cut in what physicians are paid for taking care of Medicare patients. Had the pay cut been implemented, doctors would have dropped out of the program in droves. Instead, Congress approved a minor increase (1.1 percent) in reimbursement rates for doctors, paying for it by rolling back $12 billion in unjustified taxpayer subsidies to insurance companies that offered private Medicare plans.
While wise, last week's Medicare reform measure doesn't come close to solving the system's very real financial issues. It merely postpones the hard decisions about Medicare spending until a new administration is in place. Unfortunately, that looks like the approach Congress is likely to take for most domestic policy issues for the remainder of the year.
The roots of this particular confrontation between the White House and Congress go back to 2003, and passage of the Medicare prescription drug act, the largest expansion of Medicare in the program's 40-year history. At the time, the Republican-controlled Congress insisted on two ideological "reforms" to Medicare.
The first forbade the federal government from negotiating drug prices with pharmaceutical companies, a decision that ensured healthy profits for Big Pharma as well as a hefty annual increase in costs for the new program. The Veterans Administration has been negotiating drug prices for years and saving taxpayers billions, yet Congress specifically barred Medicare from following suit.
The second major favor to industry created subsidies for private insurance companies — Humana, UnitedHealth and the like — to market all-in-one Medicare plans to retirees who wanted one premium price for physician, hospital and other medical services. The result was that Medicare paid those private plans 13 percent more than standard Medicare, even though they cover the same services.
The Republican insistence that big insurance companies deserve a subsidy so they can compete against traditional Medicare never made sense. These plans, known as Medicare Advantage, do nothing substantive to justify the extra cost to taxpayers.
However, cutbacks in doctor reimbursement rates may have only been delayed for another year or two, not avoided altogether. Those proposed cutbacks stem from budget bills passed in the 1990s that were supposed to reduce Medicare payments if the federal deficit remained high.
But year after year, Congress has refused to impose those annual Medicare reductions, as the law allows it to do. Under the law, such cutbacks are merely postponed for a year, and are supposed to be cumulative. That's why doctors were facing a 10.6 percent cut this year. By putting off the cut this year, next year's cut will have to be even more.
Everyone agrees that the formula for paying doctors is broken. But Republicans and Democrats aren't anywhere close to agreeing on how to fix it. The most reasonable approach would be to bundle payments to doctors, or groups of doctors, who care for patients with chronic conditions such as diabetes and congestive heart failure. The healthier the doctors keep their patients, the lower the cost to taxpayers and the higher the reimbursement rate.
Instead, Medicare still pays doctors for more than 7,000 "units of service" — ordering tests, changing medications, requiring more frequent visits from patients — all of which are billed separately. With few exceptions, there is no financial incentive for physicians to keep their per-patient cost under control.
Congress and a new president should have a healthy debate on Medicare funding next year. But in the meantime, at least insurance companies will no longer be getting a government handout.
— Mike King, for the editorial board
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More on ajc.com
- Medicare fix only delays inevitable (07/27/2008)
- Congress overrides Bush veto of Medicare doctor pay bill (07/16/2008)
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